Business Intelligence, Analytics, Data Driven Decision Making – so many tools at hand for the modern manager to outcompete peers and competitors. You’re smart, you’re savvy, you’re aggressive and you know your numbers and facts. Nobody can fool or stomp you, you’re the example of what it means to be successful in the digital economy and your company has afforded you all the latest tools and gadgets.
Is this you?
Congrats, you officially are part of the “too smart for your own good” group of managers. You think that because you’ve run the numbers, used all of your experience and smarts, and analyzed the issue at hand that you’re making a data driven decision.
Here is the issue, humans suck at judgment. How much we suck at it depends what we have to judge – we’re better at assessing raw data than, let’s say personality. But even in ideal conditions humans will rarely be more than 50% accurate (at scale, in individual occurrences we can attain around 90%). That’s just the limitation of our human hardware.
What does that mean? It means that your sales pitch, marketing campaign or strategic decision that you just made based on all of that data (which is still your human decision) is just as likely right than wrong.
Why is that? Very simple – the world has changed.
Humans need an environment that’s regular and offers them sufficient practice in order to make good decisions. That was the context provided to most workers over the last few hundred years and roughly up to 2015. But in today’s digital world the paradigm has shifted. Data today is unstructured (text from online sources, images and video from the media, audio from the media or teleconferences, emails or other messages on your internal platforms) and the human brain and current tools are just unable to comprehend it.
Imagine you’re a farmer in 1850; human judgment, your experience, skills and intelligence will make the difference between a good crop or a bad, producing more and better milk than your neighbor, or harvesting higher yielding produce. If you were way ahead of your time, and started to make some data driven decisions (weather patterns, soil quality, nature of the crop, etc) you most likely were the king of your village, if not the entire county. Human judgment and data driven decision making are your key differentiating factors, along with hard work. You’re rich and famous.
Now imagine you’re a factory manager in 1950; you certainly will need tremendous amounts of human judgment, experience, skills and intelligence to build better cars than your competitor – we welcome the birth of the business school. You, without a doubt, will also have needed strong data driven decision making – and that is how you differentiate from the other great managers. The industrial era brought along a host of processes, frameworks, KPIs and data points that laid the foundation for sound management. A lot of structured and still fairly simple data and, with hard work and superior intellect, probably your best shot at success.
Fast forward to the year 2000 or so. You use Google Analytics, you’ve implemented Tableau or Cognos, you have advanced DB management and data as clean as chip manufacturing lab. It’s getting complicated, a lot of complex data but it’s still doable because it’s structured and from a few sources. You’re probably a multi millionaire and retired in Florida or Italy.
Now imagine you’re a sales rep, marketing manager or executive in 2017. You have all the BI tools and analytics available in the market at your fingertips. You’re world class at crunching the numbers, have the discipline of an astec when it comes to sticking with facts, and continuously test, improve and iterate. You’re probably pretty good at your job and pretty successful but certainly far away from retirement. And you just tried to fit an elephant into a shoebox (click image below for an illustration).
Data today is too complex, too fast, too vast and too unstructured for our human brains and current skills to even start to comprehend.
- First of all, you’re most likely looking at only a fraction of the available and relevant data, no matter how good a job you’re doing. There is a whole new world of sources of data out there that you’re not even aware off – your email that contains golden nuggets of wisdom, public expert sources, internal enterprise systems that know your customers better than anyone else, the media, influencers, and the list goes on.
- Second, you do not have the technology to truly understand this complex, unstructured data.
- Third, you’re subjecting it to decades of ingrained human bias that invalidates even the best effort at extracting meaning from the data you run.
Outside of a few select luminaries such as Jim Simmons at Renaissance Technologies or Sergey Brin at Google, I would argue that probably no woman or man on (working) planet earth has made a truly data driven decision in the last 2 years.
The amounts and complexity of data created in the last 2 years, and every day in the present, has significantly outpaced not only our human capabilities but also current enterprise technology.
New tools (yes, A.I.) and a new way of working, that’s profoundly rooted in skills of data science, technology and decision making, are needed to survive in today’s work world.
If you don’t believe me go ahead and do your job the best you can; I guarantee you that there is a startup somewhere in the US, a scientist somewhere in Israel, a developer somewhere in China or Russia, who’s currently working on a way to replace, automate or completely transform whatever job it is that you will be doing when you wake up tomorrow morning. And you won’t even see it coming!